That 100% assurance that no one can day trade seems a bit, ever seems like a bold declaration. I'm sure there are prodigies that can, but the other 99% of us suck at it over time.
Day Trading for a Living?
131–140 of 377 posts
Re: Day Trading for a Living?
#132Earlier quoted context omitted.
Anything that worked consistently yesterday will no longer work tomorrow as the HFT's arbitrage that market inefficiency away. That's one of the reasons why even extensive back testing isn't a reliable indicator that a trading strategy will be successful.
That's not so simple because swing trading is not looking for Arbitrage. 90% of traders lose but a good portion of us make money. It is about building a system which works in bull and bear markets.
My firm uses a similar system that hedges long and short baskets and can confirm that hedging is really the only way to swing trade profitably in the long term.
Re: Day Trading for a Living?
#133If you take Jan 1, 2013 to Dec 31st, 2015, the Brazillian stock market did very, very poorly. That probably explains why it was nearly impossible since most traders are probably long, not short the market. So even taking 1 day positions in stocks, still on average over 3 years will experience signifigant downward price pressure. That said, the fact that the market is bad, is just randomness and shows one of the major…
Agreed. If the sample was California-based day traders specializing in SAAS software stocks between 2016 and 2018, would the sub-headline be that 97% of traders made great profits?
Re: Day Trading for a Living?
#134This is akin to saying "it is impossible to gamble at the casino for a living", which for the overwhelming majority of people is true. Having said that, it's not impossible. People have beaten casinos before, and they have beaten markets, by finding an edge over the house (or market) - but it's never the typical Joe type. In day-trading, the typical Joe uses so-called "technical analysis", the same stuff you'll find in books and taught by course providers, which offers absolutely no edge over the market. It's simply cashing in on hope.
Re: Day Trading for a Living?
#135"We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and persisted for at least 300". How do they know it is "all"?
Re: Day Trading for a Living?
#136Earlier quoted context omitted.
Making a living on poker? Absolutely. Making a living on craps or roulette? Not mathematically impossible, but highly improbable. How do they get their edge?
Not likely. But there are some strategies that amount to exploiting casino promotions and perks. There used to be some tricks around slot machines - like those near the door had a payout ratio above 1.0. There are probably still tricks along those lines, but if they become well known the casino's change them. You'd be much better of sticking to games of skill.
Fair enough. I've heard of craps players teaming up to play huge on both sides of the pass/don't pass, which would still have a negative EV. But they racked up comps pretty quickly which supposedly gave them a slight overall return when factoring that in. This might be good for a while to accumulate free rooms and whatnot, but not sure how one would actually make a living doing this.
Re: Day Trading for a Living?
#137Earlier quoted context omitted.
Because that is not a representative sampling of the day trader population. Assuming the techniques of the study were sound, at best we can conclude whether or not day trading Brazilian futures is a sustainably profitable undertaking.
Wouldn't you need a basis for believing that day trading Brazilian futures has unique properties not present in other markets to assert this? E.g. the volatility or spread is significantly larger than European futures or the information flow is more tightly de/regulated etc. Is there a basis for believing this?
Yeah what you are doing is nowadays known as the "Trump approach".
Re: Day Trading for a Living?
#138Earlier quoted context omitted.
$20,000 per year is livable in many areas of the US, especially if you have a lot of savings to back that up. The point is that saying it's "impossible" is a lie.
Where is $20,000 ‘livable’? Savings or not, I don’t know of many places where you could live on a net income of ~$1,300/mo. what do you do for medical benefits alone in that income bracket?
Upper Michigan:
If you have $20,000 you get MI Health plan, essentially free healthcare in the poor income bracket (for now anyway unless it gets taken away, sign up where you get food stamps).
Rent on a 2 bedroom apartment, as long as you are not in the "big" city of Marquette should be $400-$500.
Heck when I was younger we 'rented' an entire 5 bedroom house, two story with basement for $950 (split 4 ways with roommates).
Food and cost of living is cheap, especially if you go to farmers markets and buy stuff in season.
Winter can be tough as heating costs go up, however they do offer those 'locked' in plans where you pay more in summer month but less in winter as it averages out your price. Overall you always pay more this way, however if you have trouble managing money having a steady rate can be more beneficial.
If they took medical benefits away from low income bracket which I could see happening, well just hope you don't get sick, otherwise the rest is doable. As my dad once told me when I moved out at 18, as long as you got a roof over your head, and food in your stomach, the rest is details.
Re: Day Trading for a Living?
#139I've done ok trading stocks and FX, probably enough to live off. There is a caveat however; you need to have a sizeable portfolio to begin with. Otherwise, the risks you'll need to take are simply too large. If you think you're going to turn £5k into £500k in a year, forget it! But turning £5k into £5.3k is certainly doable. Scale that initial portfolio to £5m, and you can take home £300k with relative ease in a good…
But could you have turned £5m into £5.3m with purely passive investment? That's like a 6% return/year.
Re: Day Trading for a Living?
#140Earlier quoted context omitted.
Poker isn't gambling, but a game of skill. Are there many people making a living actually gambling on something like craps or roulette.
Making a living on poker? Absolutely. Making a living on craps or roulette? Not mathematically impossible, but highly improbable. How do they get their edge?
Roulette you just play the statistics: not really an edge. You run the Martingale system (double your bet after every loss), and my quick monte carlo simulation says I'd turn $1 into $2,250 after 5,000 iterations. But I'd need a bankroll of $8,200 to cover the 13 consecutive losses my model spit out. And if your bankroll is that big, there are easier ways to get the same return.
(Oh, and most tables have maximums, so you can't keep doubling your bet to infinity.)